U.S. Postal Service lost $1.9 billion in 2nd quarter

The U.S. Postal Service lost $1.9 billion during its second quarter -- and losses will continue mounting if Congress doesn't pass legislation giving the beleaguered mail carrier more flexibility in how it runs its operations, the postmaster general said Friday.

“To return the Postal Service to solvency requires a comprehensive approach, which is reflected in our updated five-year business plan,” said Postmaster General Patrick Donahoe.

“The major elements of the plan must be pursued and executed within a short window of opportunity to avoid unsustainable losses and potentially becoming a long-term burden to the American taxpayer,” he said in a statement.

The U.S. Postal Service, which has seen mail volumes decline precipitously, has struggled to meet its financial obligations.

It has already reached its debt limit of $15 billion and has defaulted on $11.1 billion due for retiree health benefits last year. It expects to default on an additional $5.6 billion in September, the postal service said.

To cut costs, the agency has reduced its workforce by 46,000 in the last year, mainly through attrition and severances. It now has the lowest number of employees since 1996.

The agency said Friday it is mulling postage price increases, a move some say would chase more customers away and worsen financial woes.

The Postal Service said Congress should pass legislation that would, among other things, allow it to adjust delivery frequency to five-day mail delivery, allow the agency to expand products and services, and require future employees to contribute a defined amount toward retirement.